Heim said Nov. 21 the record showed that plaintiff Daniel Berg selected the Blue Ribbon shop, Lindgren Chrysler-Plymouth, based on prior work it had performed.

Lindgren estimated Sept. 10, 1996, the repair would cost $12,326.50, but also had called the Grand Cherokee a total loss given its frame damage. Nationwide opted not to total the vehicle, and a claims log item notes: “REPAIRS ARE APPROXIMATELY 50% of ACV NATIONWIDE WILL NEVER RECOVER THE DIFFERENCE IN SALVAGE VALUE.”

Four months later, the Jeep Grand Cherokee work was finished, with some of the frame work outsourced to a third party. The vehicle was unsafe, but Nationwide either didn’t inspect it as it should have or did inspect it and didn’t tell the Bergs, Sprecher concluded in 2014.

Sprecher in 2015 decried Nationwide’s attempt to use a “scorched earth” litigation policy costing $3 million in its own attorneys fees and notes “several legal duties and fiduciary obligations that it recklessly disregarded.”

He awarded $18 million plus another $3 million based on what Nationwide paid in its own attorneys. The Superior Court’s overturning of Sprecher’s decision appears to mean that Nationwide would only be responsible for the $295 in actual damages a jury awarded for finding Nationwide violated Pennsylvania’s unfair trade practices law.

The jury also determined Lindgren should have to pay $1,925 in compensatory damages.

Duty just to pay?

Berg sued Lindgren and received a judgment for poor repairs, Heim told the Supreme Court Nov. 21, “which is the way this should have worked. Nationwide’s duty, under its policy, was to pay.”

Pennsylvania Supreme Court Justice David Wecht said an “interesting” legal issue involved whether there was a “guarantee” and/or “heightened duty” in a DRP network.

Presumably in developing such a network, Nationwide procedures exist to “inspect these shops and maintain certain standards,” Wecht said.

Heim said there was a “heightened guarantee” over what support the consumer would receive should they pick a non-network body shop.

If the non-Blue Ribbon body shop erred, the customer’s recourse would be to take action against the shop, Heim said. But using a DRP shop offered a “heightened guarantee” in which Nationwide would stand behind such a consumer until that repair was done, he said.

Asked by Justice Max Baer if Nationwide agreed that it was the “surety” of its Blue Ribbon direct repair shops, Heim said “no.”

How could the carrier offer a guarantee the work would be appropriate but not be the “guarantor of the work,” Baer asked.

The insurer offered a guarantee that if their DRP shop’s work was wrong, “they will continue to pay for it until it is done correctly,” Heim said. “That’s really what it is, judge.”

Plaintiff’s attorney Kenneth Behrend of Behrend & Ernsberger also addressed Nationwide’s duty regarding repair quality. However, he largely seemed to tie that responsibility to the insurer’s election to repair the Jeep rather than Lindgren being a DRP shop.